CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
The place of effective Carbotage Law in the seemingly porous and loose marine transport system in Nigeria cannot be pushed to the dark. Globally, shipping plays an important part in the economic life of nations. This is because it provides an inexpensive way of carrying people and goods from one place to the other, compared with other modes of transport. It may be between one country and another or even within a particular country, moving from one coast to the other. The demand for shipping is an indirect one as it is not demanded as an end in itself, but only as a means to an end. In other words, it is a derived demand, since it does not create its own demand, but its demand is derived from trade in goods (Walter, 2010).
Generally, shipping activities have been going on for a very long time. The first known sea trade network was developed about 5,000 years ago between Mesopotamia, Bahrain and the Indus River in Western India (Stopford, 2009). In modern times, shipping has assumed an important position in the carriage of goods and passengers across the globe. It constitutes an important component in world trade, carrying about 90% by volume of cargoes generated globally.
The modern international maritime transport system falls into three zones: interregional transport, which covers deep-sea shipping; short-sea shipping, which transports cargoes of short distances and often distributes cargoes brought in by deep-sea services; and inland transport (Stopford, 2009).
Deep-sea shipping is the only economic transport between the continental landmasses for high-volume inter-regional cargoes. On the other hand, short-sea shipping provides transport within regions. It involves distribution of cargo delivered to regional centres by deep-sea vessels. However, short-sea shipping is subject to many political restrictions, one of which is cabotage, the practice of enacting laws. which reserve coastal trade to ships of the national fleet of a particular country (Stopford, 2009).
Ocean shipping is one of those three vital economic areas whose indigenous control or lack of it may make or mar the fortunes of a country’s socio-political independence. Of the other two – banking and insurance – significant progress at such control has been made in Nigeria. In the case of ocean shipping, Nigeria is still to have effective control in this area covering the supply and pricing of the services to the country.